The latest round of sanc­tions against Rus­sia have the op­por­tun­ity to hurt Rus­sia’s oil in­dustry, its crown jew­el. But for that to work, they may have to hurt one of the most valu­able com­pan­ies in the U.S.

Sanc­tions from the Com­merce De­part­ment’s Bur­eau of In­dustry and Se­cur­ity will re­quire U.S. com­pan­ies to ob­tain li­censes in or­der to ex­port tech­no­logy to Rus­si­an oil pro­duc­tion in the Arc­tic and else­where. The meas­ures “are de­signed not to im­pact Rus­si­an cur­rent pro­duc­tion, but to im­pact their abil­ity to pro­duce in more tech­no­lo­gic­ally chal­len­ging fu­ture pro­jects,” a seni­or ad­min­is­tra­tion of­fi­cial said Tues­day.

One of these fu­ture pro­jects, however, in­volves Amer­ica’s biggest oil com­pany: Ex­xon Mo­bil.

In 2011, Ex­xon and Rus­sia’s state-run oil gi­ant, OAO Ros­neft, formed a $500 bil­lion part­ner­ship to ex­plore Rus­si­an seas for oil. It was a happy mar­riage at the time: Ex­xon needed Rus­sia’s un­tapped re­serves to nurse its stead­ily drop­ping out­put, and Rus­sia needed Ex­xon’s tech­no­lo­gic­al ex­pert­ise and mar­ket know-how to main­tain its status as the world’s largest oil pro­du­cer. But the ven­ture was signed in the days of Pres­id­ent Obama’s Rus­si­an re­set—long be­fore Syr­ia, Snowden and, most re­cently, sep­ar­at­ists in east­ern Ukraine made U.S.-Rus­sia re­la­tions the shaki­est since the Cold War.

Ex­xon and Ros­neft have plans to drill their first ex­plor­a­tion well in the Arc­tic this year, tar­get­ing a de­pos­it that may hold more oil than the pet­ro­leum-rich North Sea, which made Nor­way rich. As many as 40 oth­er wells would fol­low in the next few years, with one in the Black Sea. The com­pan­ies also planned to frack shale fields in Siber­ia.

Ex­xon Mo­bil spokes­man Alan Jef­fers said Wed­nes­day night that the cor­por­a­tion is as­sess­ing the im­pact of the sanc­tions. He could not say how long such an as­sess­ment may take.

The new sanc­tions put U.S. oil com­pan­ies work­ing with Rus­sia in an un­com­fort­able spot. If the Ex­xon deal moves for­ward, Amer­ica’s most prof­it­able en­ergy com­panywill be in­vest­ing bil­lions in Rus­sia’s long-term en­ergy strategy at a time when all Wash­ing­ton wants to do is isol­ate Mo­scow. If the part­ner­ship is put on ice, the Obama ad­min­is­tra­tion would have hurt Rus­sia at the ex­pense of U.S. oil pro­duc­tion.

The bond between Ros­neft and Ex­xon is a strong one. Last sum­mer, Rus­si­an Pres­id­ent Vladi­mir Putin awar­ded Ex­xon CEO Rex Tiller­son the Or­der of Friend­ship, which is meant to re­ward for­eign na­tion­als whose work im­proves the Rus­si­an na­tion and its people. “Most big U.S. com­pan­ies, es­pe­cially those mak­ing long-term stra­tegic de­cisions, dis­miss Rus­sia-U.S. polit­ics as something of a soap op­era with fre­quent script changes,” Chris Weafer, man­aging dir­ect­or of Macro Ad­vis­ory, a Mo­scow-based con­sult­ing firm for in­vest­ment op­por­tun­it­ies in Rus­sia, told Bloomberg’s Steph­en Bier­man in Janu­ary.

In April, when the U.S. Treas­ury De­part­ment black­lis­ted Ros­neft CEO Ig­or Sechin, who is thought to be be­hind Rus­sia’s en­ergy strategy, Ros­neft shares hit a 10-month low. But neither Ros­neft nor Ex­xon blinkedwhen it came to their luc­rat­ive oil-ex­plor­a­tion deal.

At least one mem­ber of Con­gress has ex­pressed con­cern about the part­ner­ship. After meet­ing with Ukrain­i­an lead­ers in May, Sen. Ted Cruz, R-Texas, said that the U.S. “should look very closely” at the deal.

While the latest sanc­tions cer­tainly carry more weight than black­list­ing a CEO, Ex­xon and Ros­neft’s part­ner­ship is not ex­pec­ted to buckle. Glob­al­iz­a­tion—and the profit that comes with it—is top pri­or­ity for both com­pan­ies. For Ex­xon, “their fi­del­ity is to their share­hold­ers, not ne­ces­sar­ily their gov­ern­ment,” wrote Mat­thew Philips for Bloomberg Busi­nes­s­week in March.

U.S-Rus­si­an re­la­tions are already tense in the Arc­tic. Rus­sia has been vy­ing for years for more con­trol of the re­gion, which in­cludes the North Pole and is home to 15 per­cent of the world’s oil. The U.S. has not yet rat­i­fied a United Na­tions con­ven­tion that would al­low it to re­quest more ter­rit­ory, through Alaska, but law­makers are wor­ried that the U.S. isn’t do­ing enough there any­way.

“Our coun­try has more work to do to catch up with oth­er Arc­tic na­tions,” Rep. Rick Larsen, D-Wash., said earli­er this month when Adm. Robert J. Papp Jr. was ap­poin­ted the State De­part­ment’s spe­cial rep­res­ent­at­ive to the Arc­tic. On Tues­day, the day Obama an­nounced the latest sanc­tions, Papp lamen­ted, “How do you get the gen­er­al Amer­ic­an pub­lic to un­der­stand that we’re an Arc­tic na­tion?”

The Amer­ic­an pub­lic may not see it that way, but Ex­xon Mo­bil cer­tainly does.

"President Trump signed a sweeping spending bill Friday afternoon, averting another partial government shutdown. The action came after Trump had declared a national emergency in a move designed to circumvent Congress and build additional barriers at the southern border, where he said the United States faces 'an invasion of our country.'"

Source:

REDIRECTS $8 BILLION

Trump Declares National Emergency

6 days ago

THE DETAILS

"President Donald Trump on Friday declared a state of emergency on the southern border and immediately direct $8 billion to construct or repair as many as 234 miles of a border barrier. The move — which is sure to invite vigorous legal challenges from activists and government officials — comes after Trump failed to get the $5.7 billion he was seeking from lawmakers. Instead, Trump agreed to sign a deal that included just $1.375 for border security."

Source:

COULD SOW DIVISION AMONG REPUBLICANS

House Will Condemn Emergency Declaration

1 weeks ago

THE DETAILS

"House Democrats are gearing up to pass a joint resolution disapproving of President Trump’s emergency declaration to build his U.S.-Mexico border wall, a move that will force Senate Republicans to vote on a contentious issue that divides their party. House Judiciary Committee Chairman Jerrold Nadler (D-N.Y.) said Thursday evening in an interview with The Washington Post that the House would take up the resolution in the coming days or weeks. The measure is expected to easily clear the Democratic-led House, and because it would be privileged, Senate Majority Leader Mitch McConnell (R-Ky.) would be forced to put the resolution to a vote that he could lose."

Source:

MILITARY CONSTRUCTION, DRUG FORFEITURE FUND

Where Will the Emergency Money Come From?

1 weeks ago

THE DETAILS

"ABC News has learned the president plans to announce on Friday his intention to spend about $8 billion on the border wall with a mix of spending from Congressional appropriations approved Thursday night, executive action and an emergency declaration. A senior White House official familiar with the plan told ABC News that $1.375 billion would come from the spending bill Congress passed Thursday; $600 million would come from the Treasury Department's drug forfeiture fund; $2.5 billion would come from the Pentagon's drug interdiction program; and through an emergency declaration: $3.5 billion from the Pentagon's military construction budget."

Source:

TRUMP SAYS HE WILL SIGN

House Passes Funding Deal

1 weeks ago

THE DETAILS

"The House passed a massive border and budget bill that would avert a shutdown and keep the government funded through the end of September. The Senate passed the measure earlier Thursday. The bill provides $1.375 billion for fences, far short of the $5.7 billion President Trump had demanded to fund steel walls. But the president says he will sign the legislation, and instead seek to fund his border wall by declaring a national emergency."